China commits $6.5bn for Karachi nuclear project

ISLAMABAD: China has committed $6.5 billion to finance the construction of a major nuclear power project in Karachi as it seeks to strengthen ties with its strategic partner, Pakistani officials said.Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it. Financing documents seen by Reuters showed China National Nuclear Cooperation (CNNC) has promised to grant a loan of at least $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each. Two members of the government’s energy team and three sources close to the deal confirmed this. CNNC was not available for comment.“China has complete confidence in Pakistan’s capacity to run a nuclear power plant with all checks in place,” said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission which runs the civilian nuclear programme. “As things stand, the performance and capacity of nuclear power plants in Pakistan is far better compared to non-nuclear plants.” Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in Pakistan.As part of the deal, China has also waived a $250,000 insurance premium on the loan, said two sources in the Energy Ministry with knowledge of the project. They declined to be identified as they are not authorised to speak to the media about the financing. Pakistan and China, both nuclear-armed nations, consider each other close friends and their ties have been underpinned by common wariness of India and a desire to hedge against US influence in South Asia.Pakistan sees nuclear energy as key to its efforts to solve power shortages that have crippled its economy. Pakistan generates about 11,000MW of power while total demand is about 15,000 MW. Under its long-term energy plan, the country hopes to produce more than 40,000 MW of electricity through nuclear plants by 2050.